Sulfur Shortage Shakes Global Copper and Nickel Markets

The ongoing conflict in Iran is causing widespread disruptions in the global metals market, with copper and nickel now facing significant challenges. The root of the issue is the shortage of sulfur, an essential by-product of the Gulf’s oil and gas industry. Following the closure of the Strait of Hormuz on February 28, sulfur supplies have been severely impacted.

Countries like China, Turkey, and potentially India, are responding by banning sulfuric acid exports to prioritize domestic fertilizer needs. China, the largest producer, intends to cut off exports next month, compounding the issue. The demand-supply imbalance has led to a notable increase in sulfur prices, with recent spikes setting new records.

The impact is pronounced in the Democratic Republic of Congo and Chile, major copper producers, as well in Indonesia’s nickel industry. With sulfur accounting for significant portions of production costs, prices are rising sharply, evidenced by recent peaks in LME nickel and copper prices. Industry players now await resolutions to the geopolitical tensions in hopes of stabilizing the markets.